Stock Market Hits Fresh Records as AI Goes Nuts & Protests Over Poor School Conditions Erupt in France

SPEAKER_1 (0:01)

Are you sucking wind from trying to keep up with AI and its impact? Take a breather and tune in to The Intelligence Shift, Morning Brew's new podcast with PWC. It bridges the gap between big picture AI concepts and what it actually means in practice. Host Dan Priest is joined by expert guests to discuss AI's role in sports, music, HR, and more. Listen to The Intelligence Shift wherever you get your podcasts.

Neal Freyman (0:25)

Good Morning Brew Daily show. I'm Neal Freyman.

Toby Howell (0:28)

And I'm Toby Howell.

Neal Freyman (0:29)

Today, why a change to a comedy radio station is no laughing matter.

Toby Howell (0:33)

Then despite everything going on, the stock market can't stop hitting record highs. It's Wednesday, October 7th. Let's ride.

Neal Freyman (0:47)

You might be firing up Amazon during its big deal days event today and tomorrow. But before you start browsing, check out a new feature Amazon release that reveals what it thinks it knows about you. Called About You, the AI tool lists oddly specific preferences it's picked up from your shopping habits. People have been sharing their About Yous on social media, highlighting some funny assumptions like uses phone in the shower to read Kindle books and treats cats as biological children. Toby, mine's pretty tame, but I'm happy with the results. Amazon thinks I read diverse fiction and actively maintain indoor plants.

Toby Howell (1:22)

About You is the Plato's cave of our time. It's this distorted reflection of your consumption that actually gets a lot closer to your essence than you'd like to admit. If you want to see yours, go to account, shopping preferences, then click About You. Apparently, I prefer beans across many varieties and prefer Umami Ford specialty ingredients. Son of a gun, I think they got me.

Neal Freyman (1:49)

And now a word from our sponsor Intuit. Toby, you know how I've always been passionate about enterprise resource planning?

Toby Howell (1:55)

Yeah, you talk about it a lot during meetings, at happy hours, during the impromptu speech you gave at my wedding.

Neal Freyman (2:00)

And I won't apologize for caring deeply about the problems facing finance teams and CFOs. They're stuck with a system that cost them a fortune and still won't let them create a report themselves. It's not right.

Toby Howell (2:11)

Well, thankfully, there's the Intuit ERP for that.

Neal Freyman (2:14)

Exactly. Your team runs one close, however many entities you have. They build their own reports, no consultant required. And getting started doesn't take over your year, all without the legacy ERP baggage.

Toby Howell (2:25)

You've been waiting all day to say that.

Neal Freyman (2:27)

To learn more, head to intuit.com/erp. That's intuit.com/erp.

Toby Howell (2:35)

It's a bird, it's a plane, nope. It's the S&P 500 The seemingly invincible index hit another all time high yesterday, crossing a total valuation of over $71 trillion. There's now up 14% on the year and 24% since its bottom in March. Despite hurricane level headwinds from the war in Iran, driving up energy prices and a sharp increase in interest rates, the index notch is 28th record close of the year yesterday. The rally stems from those headwinds abating just ever so slightly. Both oil and yields fell yesterday with Brent crude dipping below the triple digits threshold and the 10 year treasury falling a couple basis points. Toss in a healthy dose of renewed optimism around the AI trade fueled by the rise of agents like Muse. And you have a recipe for a high flying stock market. Now, all of those positive factors come with a degree of danger to them. The straight of our moves is still not fully open, keeping energy prices elevated and inflation fears nearby. Treasury yields too are still sitting right around levels not seen since the lead up to the financial crisis. And this is not a broad rally. Mega cap tech stocks like Nvidia and SpaceX have been doing a lot of the heavy lifting. But if you exclude AI from the market this year, the S&P 500's gains would be cut in half. At the beginning of this month, more than half the stocks in the index were trading below their 200-day moving averages, signaling turbulence beneath the surface. Neal, pretty remarkable to see the market rip like this in the face of seemingly so much adversity. Call it the 2007 Patriots. That ended well, right?

Neal Freyman (4:09)

Eli got so lucky. But like the Patriots, there are some superstars. There are three superstars in this particular market. They're the West Welker, Andy Moss and Tom Brady of the market. They are NVIDIA, Apple and Microsoft. Those three companies represent over 21% of the S&P 500 That is a record high. We have never seen anything like this. The trio in second place is from the 1980s. IBM, AT&T and Exxon Mobil. They represented at their peak 13.4% of the S&P 500 Now, we have three companies that represent over 21% of the S&P 500 We really haven't seen such... We talk about concentration in the AI names. It's really concentration in three massive companies in NVIDIA, which is staring down a $6 trillion valuation, Apple and Microsoft.